Financial decision is important to make wise decisions about when, where and how should a business acquire fund. Which of the following is not one of the three fundamental methods of firm valuation? Compared to firms that provide a good lifestyle for the owner but little in the way of attractive returns, a firm with potential for high growth and large profits has _____ possible sources of financing. this is a type of financing unaffected by changes in tax law. leasing is a renewable source of intermediate-term funds. Which one of the following is a source of cash for a tax-exempt firm? Multiple Cholce Increase In accounts recelvable Increase In depreclation Decrease In accounts payable Increase In common stock Increase In Inventory The largest source of long-term financing for U.S. firms for the last 40 years has been: a. Reinvestment of profits, b. ... C. $1 million source of cash in financing activities D. $1 million use of cash in financing activities E. $1 million use of cash in operating activities. In calculating the proportional amount of equity financing employed by a firm, we should use: the common stock equity account on the firm's balance sheet. Kimberly uses $500,000 of 12.0 percent debt financing, and the cost of equity to an unlevered firm in the same risk class is 16.0 percent. A firm is considering three investment projects which we will refer to as A, B, and C. Each project has an initial cost of $10 million. Chapter 12—A Firm's Sources of Financing MULTIPLE CHOICE 1. Which one of the following terms is defined as the management of a firm's long-term investments? Question: T-16 Multiple Choice 16. Introduction to Corporate Finance. includes accounts payable. an example of "moderate risk -- moderate (potential) profitability" asset financing. What is the value of the firm according to MM with corporate taxes? On The Firm’s Balance Sheet, Long-term Debt Went From $1 Million At The End Of 2008 To $2 Million At The End Of 2009. Finance Basics MCQs systematically covers fundamental part of business finance, financial management and corporate finance... Visit the post for more. A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Because a firm tends to profit most when the market estimation of an organization’s share expands and this is not only a sign of development for the firm but also it boosts investor’s wealth. the book value of the firm. D. C. A person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock. c) Balance sheet - where the firm is valued in terms of its assets. 9. Financing a long-lived asset with short-term financing would be. Multiple Choice Questions. a) Discounted Cash flow b) Income or earnings - where the firm is valued on some multiple of accounting income or earnings. Any person or entity that has voting rights based on stock ownership of a corporation. d) Market Share 2.22..2. is the amount of current assets required to meet a firm's long-term minimum needs. Financing Decision. an example of "low risk -- low (potential) profitability" asset financing. the sum of common stock and preferred stock on the balance sheet. 4. Investment A offers an expected rate of return of 16%, B of 8%, and C of 12%. B. companies, financial institutions, and individuals derive different benefits from owning assets. Borrowing from banks, c. Long-term bonds, d. 34. The firm's cost of capital is 6% if it borrows $10 million, 10% if it borrows $20 million, and 15% if it borrows $30 million. the current market price per share of common stock times the number of shares outstanding. 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